Investing.com - The U.S. dollar drifted lower against the
Canadian dollar on Monday in thin trade, as markets in both the
U.S. and Canada remained closed for the Labor Day holiday.
USD/CAD slid 0.15% to 1.0860 from 1.0875 late Friday.
The pair was likely to find support at around 1.0825 and
resistance at 1.0880.
The Canadian dollar rose to one-month highs against the U.S.
dollar on Friday after official data showed that Canada's economy
grew at a faster-than-expected rate in the second quarter.
Statistics Canada reported that the economy expanded by an
annualized 3.1% in the three months to June, ahead of expectations
for 2.7%. Faster economic growth was attributed to a 17.8% increase
in exports, while household spending jumped 3.8%.
On a quarter-over-quarter basis, the Canadian economy expanded
0.8%, following a 0.2% increase in the first quarter. It was the
largest quarterly gain since the third quarter of 2011.
But the loonie, as the Canadian dollar is also known, backed off
one-month highs as broadly upbeat U.S. data indicated that the
economic recovery is on track.
On Thursday, revised data showed that U.S. gross domestic
product expanded at an annual rate of 4.2% in the second quarter,
up from a preliminary estimate of 4% and rebounding from a first
Data on Friday showed that U.S. consumer sentiment rebounded to
a seven year high in August, while another report showed that
manufacturing activity in the Chicago region continued to expand in
This offset a separate report showing that U.S. consumer
spending unexpectedly fell 0.1% in July.
Elsewhere, the loonie was close to 21-month highs against the
broadly weaker euro, with EUR/CAD at 1.4266.
The single currency was pressured lower amid mounting
expectations for quantitative easing by the European Central Bank
as a way to shore up long term inflation expectations.
Concerns that sanctions against Russia would act as a drag on
growth in the euro zone also continued to weigh on the shared
currency following weak data on German second quarter growth and
soft euro zone factory data earlier Monday.
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